Privacy Advisor

Consumers Still Don't Trust the Internet

December 1, 2005

Isaac Scarborough

It just keeps coming, doesn't it? Consumers increasingly are voicing their concerns about online commerce and marketing, and every month or two brings more data about how they are responding to security and privacy concerns. Recently, Consumer Reports WebWatch brought out a new study, "Leap of Faith:Using the Internet Despite the Dangers." The title is ominous enough — and the report upholds some earlier pessimistic observations about Internet behavior.

In July, the Pew Internet & American Life Project released a study showing that 48 percent of consumers had adjusted their online behavior because of the threat of spyware. In the WebWatch report, 53 percent of respondents said they had stopped giving out personal information online, 30 percent claimed to be using the Web less in general, and 29 percent say they are curtailing online shopping, at least somewhat.

This seems in line with what we have heard in the past: consumers are getting warier and more willing to change their behavior because of real or perceived online threats. Also bolstering this claim is the fact that 88 percent of the survey's respondents said that it was very important to know if "the site will keep personal information I provide safe and secure" when deciding what Web sites to visit.
On the face of it, at least, the report seems like more depressing news.

Cleaning House
The report — fairly convincingly — demonstrates that consumers are still unconvinced about their privacy and security online. It also shows that many users are still unaware of how advertising works online. Although 69 percent of the survey's participants said that it was "very important" for advertising to be clearly labeled and distinguishable on Web sites dedicated to news, when it came to search engines, only 44 percent understood that search engines are paid to display some search results.

But consumers suspect that things are actually worse than they are. Fifty-percent of online users describe search engines as "mostly show[ing] results for sites that pay to be listed prominently." This, combined with the 88 percent who strongly want to know about a site's privacy practices, should be another good reason for us in the marketing business to make sure our procedures are well disclosed and in line with industry best practices.

More Familiarity = More Trust
We have heard some of this before. But within the results there are some interesting and even optimistic numbers that have gone largely unreported. Consumer Reports asked a question that had not been asked too often before: of those who trust online businesses, how many were users of the business in question?

For example: the report found that banking Web sites are trusted by 68 percent of all Web users, but amongst those who actually do online banking, 93 percent say they trust such sites.
This pattern holds across the board — from shopping sites to financial sites of all kinds and sites that offer consumer advice. Of those users who shop online, 89 percent report that
they trust online stores, whereas only 36 percent of those who do not shop online say the same.

This appears to demonstrate a simple fact about online behavior —the more familiar a user is with a particular niche, the more comfortable and trusting they are of it. I suppose that this is intuitive, but it is also good news. It means that Web users who do their banking online or shop for products are not, by and large, disappointed by the experience. They have gained reason to trust the organizations they do business with.

There do remain those online users who do not trust online commerce and marketing — and these are the people who we need to convince by boosting consumer security, disclosing the collection of private information and generally setting them at ease.

There are two steps in this direction that we might want to think about, both of which arise from the WebWatch report: Step one: 54 percent of online users report that they are now "more likely" to read a privacy policy or EULA. This being true, we would all be well- served if these documents were consistently less confusing and long. Step two: only 24 percent of respondents said that "seals of approval from other groups" were an important reason to visit (or trust) a Web site, and this seems a pity. For those unfamiliar with, say, online banking, a VeriSign seal — if they know what it means — could be important, just as most consumers look for the FDIC sticker in the window of a physical bank. Increased exposure about third-party authentication just might bring in new, previously untrusting Web users.

We know that consumers who trust online businesses are more likely to share their personal data — the Ponemon Institute reported in January that trust increases the number of consumers willing to share banking information by 22 percent. It is vitally important for us to respond to consumer concerns about identity theft and spyware, for without consumer trust we in online advertising would have a particularly rough time of it.

While the WebWatch report demonstrates that some consumers have confidence in their online safety, there remains another segment of Web users who do still do not feel secure. If online marketing — and online commerce in general — is going to continue to grow at the rate we all hope it will, then we are going to have to continue working to draw in new consumers — that is, to remove the current impediments to consumer trust.

Isaac Scarborough covers market trends for Chapell & Associates, a consulting firm that helps companies understand privacy and incorporate consumer perception into product development. He can be reached at